Silver ETFs mirror the market value of silver in real-time. Silver ETFs lessen the hassle and expense of silver storage. Not only are they more convenient than actual silver, but they also save on taxes. Read more in this article.

1. Silver ETF
Should you invest?

2. What is Silver ETF?
The pooled capital of ETFs can be invested in a wide range of securities (stocks, bonds,
commodities, etc). The assets of silver ETFs are typically held in silver or silver-related assets. The
principal holdings of a silver ETF are physical silver assets held in trust by the ETF's manager or
custodian or exchange-traded commodity derivatives (ETCD). Silver ETFs are normally set up as
grantor trusts, and each ETF share represents the right to a pre-determined amount of silver (in
ounces). ​
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The net asset value of silver ETFs is proportional to the price of silver. Silver ETFs mirror the
market value of silver in real-time. The net asset value of these ETFs will shift in response to
changes in silver's price. Silver is bought and stored safely by the silver ETF's fund management.
The Indian government's Ministry of Finance operates the Securities and Exchange Board of India
(SEBI), the country's primary securities and commodities market regulator. By policing ETFs, SEBI
protects the interests of investors. Every so often, the fund managers should have audit reports
on the silver in the vaults.

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4. SEBI Rules for Silver ETF
Restriction on expenditure: At least 95% of a fund's assets must be in silver and silver-
related instruments. Silver-related instruments might also include silver derivatives that are
traded on an exchange. So managers can also use ETCD to fulfil their obligations.
Error in keeping track: The difference between a scheme's returns and those of a benchmark
is known as the tracking error. The tracking error for investment firms is limited to a 2%
margin. Fund houses are required to disclose the percentage of tracking inaccuracy on their
website if it is greater than 2%.
Cost-Effectiveness Analysis: Expense ratios for Silver ETF schemes are capped by SEBI at
1% of AUM. Fund companies charge investors this percentage to cover the cost of running the
fund.
Purity: Fund houses must purchase actual silver with a purity of 99.99%. This standard has
been set by the London Bullion Market Association (LBMA). It helps maintain authenticity and
eliminates the possibility of adulteration.

5. Silver ETFs and Taxes
Under the purview of Indian income tax laws, gold, silver and debt ETFs are treated
similarly. As such, silver ETfs attract the following tax implications:
Silver ETFs held for up to 36 months or three years attract tax under the short term
capital gains bracket. Therefore, they are added to an individuals annual income and
are taxed according to their income slab. This applies even if the investor sells their
units at a loss.
For ETFs held for more than 36 months or 3 years, long term capital gain laws apply.
Thus income generated from sale of silver ETF units held for more than 36 months shall
be taxed at a rate of 20%. Investors can avail of indexation benefits to reduce the tax
burden attracted by LTCG on silver ETFs.

6. Here are the names of silver ETFs in India:
ICICI Prudential Silver ETF
Nippon India Silver ETF
Aditya Birla Sun Life AMC Silver ETF
DSP Silver ETF
HDFC Silver ETF

7. Popular Silver
ETF in India

8. ICICI Silver
Fund Manager: Mr Gaurav Chikane
Asset Under Management: ₹559.83 CRORE
Minimum purchase/application amount: ₹100 at NFO. Additional Investments can be in multiples of ₹1.
Exit load: 0%
Nippon India Silver
Fund Manager: Vikram Dhawan
Asset Under Management: ₹520.13 crore
Minimum purchase/application amount: ₹1,000
Exit load: 0%
Aditya Birla Silver
Fund Manager: Sachin Wankede
Asset Under Management: ₹147.06 crore
Minimum purchase/application amount: ₹500 at NFO. Additional Investments can be in multiples of ₹1.
Exit load: 0%

9. Silver ETFs mirror the market value of silver in real-time.
Silver ETFs lessen the hassle and expense of silver
storage. Not only are they more convenient than actual
silver, but they also save on taxes. Read more in this
article: Silver ETF India

10. Thank-You